The Downward Spiral
AMD was always preaching the "customer centric" mantra, but in reality, the company was changing processor sockets and making incompatible design calls almost every 12-18 months. AMD's Athlon 64 debuted with Socket 754, but when the company learned of its mistake, it created Socket 939. Athlon 64 FX was an interesting story, changing Sockets as marketers wanted: In the beginning, there was Socket 940, then 939, then back to 940 (AM2, AM2+, AM3 also use 940 pins, but are incompatible with the first S940). Also, AMD kept on promising something that it could not deliver: Backwards compatibility. SI's had ton of issues with Santa Rosa Opterons, and the whole debacle over Phenom upgrades as tested over at Tom's Hardware makes you wonder. While Intel remains silent and has been using the same socket for several years, few dared to openly criticize the giant. The company kept the same socket, but prevented an upgrade option (e.g. you cannot put a new CPU on an older motherboard, due to "some XY incompatibility").
There are numerous examples where AMD went wrong in 2007 in its communications, forgetting the workstation market at the K10 Opteron launch (this was an answer given to us by Dirk Meyer in Barcelona), abusing the channel and losing already won HPC contracts with its inability to ship thousands of Opterons to this segment. And yet, at events such as the firm's Analyst Day, you see lots of people approving the mantra of AMD leadership - and not asking critical questions.
At the end of the day, you can't describe it differently than saying that AMD screwed up badly in 2007. AMD itself called 2007 the "perfect storm" for the company, but we have to realize that everything was magnified, because all eyes were an the company. Back in 2002, and in the 1990s, nobody considered AMD to be a serious player. Now, it is in the limelight, and has been making wrong choices every step of the way. The exodus of members of the management as well as key engineers after the takeover of ATI was just the silent witness that something went terribly wrong.
Where are we now? We're left with the prospect of an AMD/ATI that could be acquired by either IBM or Nvidia. The relationship with Nvidia is a very interesting one - SNAP.
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Here's a curveball. Why doesn't Comcast move into the chip world? Comcast just threw a bunch of money at Clearwire for WiMax deployment, which is to provide one more avenue of pushing content. What if they controlled content, distribution and the end user's equipment via low-cost HTPCs, much like they control the cable box (for the most part, considering the failures of CableCard). This would be a scary situation for MS, Sony and particularly Nintendo (and likely the consumer :p). Bundle Gaming (via HTPC), VoIP over WiMax and cable/fiber, DTV and HS Internet. Vertical integration is the name of the game, not horizontal aquisition, i.e. IBM.Reply
Interesting article. One thing you didn't mention about an acquisition by NVidia are the significant regulatory hurdles to overcome, i.e., antitrust. Such a merger would create a pretty big monopoly in the add-in graphics market.Reply